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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from          to        
Commission file number: 001-11693 
LW_logo_full_simpl_pos_blue_spot_Artwork.jpg
LIGHT & WONDER, INC.
(Exact name of registrant as specified in its charter)

Nevada
81-0422894
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
 
6601 Bermuda Road, Las Vegas, Nevada
89119
(Address of principal executive offices)(Zip Code)

(702) 897-7150
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $.001 par valueLNWThe Nasdaq Stock Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒   No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐   No ☒
Common stock outstanding as of August 2, 2024 was 88,724,171.


LIGHT & WONDER, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL AND OTHER INFORMATION
THREE AND SIX MONTHS ENDED JUNE 30, 2024
Page
Item 1.
Item 2.
Item 3.
Item 4.
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Item 1A.
Item 2.
Item 3.
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Item 6
2

Glossary of Terms
The following terms or acronyms used in this Quarterly Report on Form 10-Q are defined below:
Term or AcronymDefinition
2023 10-K2023 Annual Report on Form 10-K filed with SEC on February 27, 2024
2028 Unsecured Notes7.000% senior unsecured notes due 2028 issued by LNWI
2029 Unsecured Notes7.250% senior unsecured notes due 2029 issued by LNWI
2031 Unsecured Notes7.500% senior unsecured notes due 2031 issued by LNWI
AEBITDAAdjusted EBITDA, our primary performance measure of profit or loss for our business segments
ASCAccounting Standards Codification
ASXAustralian Securities Exchange
CMScasino-management system
D&Adepreciation, amortization and impairments (excluding goodwill)
Exchange ActSecurities Exchange Act of 1934, as amended
FASBFinancial Accounting Standards Board
KPIsKey Performance Indicators
L&WLight & Wonder, Inc.
LBOlicensed betting office
LNWILight and Wonder International, Inc., a wholly-owned subsidiary of L&W and successor to Scientific Games International, Inc.
LNWI Credit Agreement
That certain credit agreement, dated as of April 14, 2022, among LNWI, as the borrower, L&W, as a guarantor, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and Swingline Lender, BofA Securities, Inc., BNP Paribas Securities Corp., Deutsche Bank Securities Inc., Fifth Third Bank, National Association, Barclays Bank PLC, Citizens Bank, N.A., Goldman Sachs Bank USA, Morgan Stanley Senior Funding, Inc., Royal Bank of Canada, Truist Securities, Inc., Credit Suisse Loan Funding LLC and Macquarie Capital (USA) Inc. as Lead Arrangers and Joint Bookrunners, as amended, restated, amended and restated, supplemented or otherwise modified from time to time
LNWI RevolverRevolving credit facility with aggregate commitments of $750 million extended pursuant to the LNWI Credit Agreement
LNWI Term Loan BTerm loan facility, issued pursuant to the LNWI Credit Agreement
Notea note in the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q, unless otherwise indicated
Participationrefers to gaming machines provided to customers through service or leasing arrangements in which we earn revenues and are paid based on: (1) a percentage of the amount wagered less payouts; (2) fixed daily-fees; (3) a percentage of the amount wagered; or (4) a combination of (2) and (3)
R&Dresearch and development
RSUrestricted stock unit
SciPlayOur SciPlay business segment
SECSecurities and Exchange Commission
Securities ActSecurities Act of 1933, as amended
Senior Notes or Unsecured Notesrefers to the 2028 Unsecured Notes, 2029 Unsecured Notes and 2031 Unsecured Notes, collectively
SG&Aselling, general and administrative
Shufflersvarious models of automatic card shufflers, deck checkers and roulette chip sorters
SOFRSecured Overnight Financing Rate
U.S. GAAPaccounting principles generally accepted in the U.S.
U.S. jurisdictionsthe 50 states in the U.S. plus the District of Columbia, U.S. Virgin Islands and Puerto Rico
VGTvideo gaming terminal
VLTvideo lottery terminal

3

Intellectual Property Rights
All ® notices signify marks registered in the United States. © 2024 Light & Wonder, Inc. or one of its Subsidiaries. All Rights Reserved.
The MONOPOLY name and logo, the distinctive design of the game board, the four corner squares, the MR. MONOPOLY name and character, as well as each of the distinctive elements of the board, cards, and the playing pieces are trademarks of Hasbro for its property trading game and game equipment and are used with permission. © 1935, 2024 Hasbro. All Rights Reserved. Licensed by Hasbro.
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FORWARD-LOOKING STATEMENTS
Throughout this Quarterly Report on Form 10-Q, we make “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results or strategies and can often be identified by the use of terminology such as “may,” “will,” “estimate,” “intend,” “plan,” “continue,” “believe,” “expect,” “anticipate,” “target,” “should,” “could,” “potential,” “opportunity,” “goal,” or similar terminology. The forward-looking statements contained in this Quarterly Report on Form 10-Q are generally located in the material set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” but may be found in other locations as well. These statements are based upon management’s current expectations, assumptions and estimates and are not guarantees of timing, future results or performance. Therefore, you should not rely on any of these forward-looking statements as predictions of future events. Actual results may differ materially from those contemplated in these statements due to a variety of risks and uncertainties and other factors, including, among other things:
•our inability to successfully execute our strategy;
•slow growth of new gaming jurisdictions, slow addition of casinos in existing jurisdictions and declines in the replacement cycle of gaming machines;
•risks relating to foreign operations, including anti-corruption laws, fluctuations in currency rates, restrictions on the payment of dividends from earnings, restrictions on the import of products and financial instability;
•difficulty predicting what impact, if any, new tariffs imposed by and other trade actions taken by the U.S. and foreign jurisdictions could have on our business;
•U.S. and international economic and industry conditions, including increases in benchmark interest rates and the effects of inflation;
•public perception of our response to environmental, social and governance issues;
•the effects of health epidemics, contagious disease outbreaks and public perception thereof;
•changes in, or the elimination of, our share repurchase program;
•resulting pricing variations and other impacts of our common stock being listed to trade on more than one stock exchange;
•level of our indebtedness, higher interest rates, availability or adequacy of cash flows and liquidity to satisfy indebtedness, other obligations or future cash needs;
•inability to further reduce or refinance our indebtedness;
•restrictions and covenants in debt agreements, including those that could result in acceleration of the maturity of our indebtedness;
•competition;
•inability to win, retain or renew, or unfavorable revisions of, existing contracts, and the inability to enter into new contracts;
•risks and uncertainties of potential changes in U.K. gaming legislation, including any new or revised licensing and taxation regimes, responsible gambling requirements and/or sanctions on unlicensed providers;
•inability to adapt to, and offer products that keep pace with, evolving technology, including any failure of our investment of significant resources in our R&D efforts;
•the outcome of any legal proceedings that may be instituted following completion of the SciPlay merger;
•failure to retain key management and employees;
•unpredictability and severity of catastrophic events, including but not limited to acts of terrorism, war, armed conflicts or hostilities, the impact such events may have on our customers, suppliers, employees, consultants, business partners or operations, as well as management’s response to any of the aforementioned factors;
•changes in demand for our products and services;
•dependence on suppliers and manufacturers;
•SciPlay’s dependence on certain key providers;
•ownership changes and consolidation in the gaming industry;
•fluctuations in our results due to seasonality and other factors;
•risks as a result of being publicly traded in the United States and Australia, including price variations and other impacts relating to the secondary listing of the Company’s common stock on the ASX;
•the possibility that we may be unable to achieve expected operational, strategic and financial benefits of the SciPlay merger;
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•security and integrity of our products and systems, including the impact of any security breaches or cyber-attacks;
•protection of our intellectual property, inability to license third-party intellectual property and the intellectual property rights of others;
•reliance on or failures in information technology and other systems;
•litigation and other liabilities relating to our business, including litigation and liabilities relating to our contracts and licenses, our products and systems, our employees (including labor disputes), intellectual property, environmental laws and our strategic relationships;
•reliance on technological blocking systems;
•challenges or disruptions relating to the completion of the domestic migration to our enterprise resource planning system;
•laws and government regulations, both foreign and domestic, including those relating to gaming, data privacy and security, including with respect to the collection, storage, use, transmission and protection of personal information and other consumer data, and environmental laws, and those laws and regulations that affect companies conducting business on the internet, including online gambling;
•legislative interpretation and enforcement, regulatory perception and regulatory risks with respect to gaming, especially internet wagering and social gaming;
•changes in tax laws or tax rulings, or the examination of our tax positions;
•opposition to legalized gaming or the expansion thereof and potential restrictions on internet wagering;
•significant opposition in some jurisdictions to interactive social gaming, including social casino gaming and how such opposition could lead these jurisdictions to adopt legislation or impose a regulatory framework to govern interactive social gaming or social casino gaming specifically, and how this could result in a prohibition on interactive social gaming or social casino gaming altogether, restrict our ability to advertise our games, or substantially increase our costs to comply with these regulations;
•expectations of shift to regulated digital gaming;
•inability to develop successful products and services and capitalize on trends and changes in our industries, including the expansion of internet and other forms of digital gaming;
•the continuing evolution of the scope of data privacy and security regulations, and our belief that the adoption of increasingly restrictive regulations in this area is likely within the U.S. and other jurisdictions;
•incurrence of restructuring costs;
•goodwill impairment charges including changes in estimates or judgments related to our impairment analysis of goodwill or other intangible assets;
•stock price volatility;
•failure to maintain adequate internal control over financial reporting;
•dependence on key executives;
•natural events that disrupt our operations, or those of our customers, suppliers or regulators; and
•expectations of growth in total consumer spending on social casino gaming.
Additional information regarding risks and uncertainties and other factors that could cause actual results to differ materially from those contemplated in forward-looking statements is included from time to time in our filings with the SEC, including under “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A in our 2023 10-K. Forward-looking statements speak only as of the date they are made and, except for our ongoing obligations under the U.S. federal securities laws, we undertake no and expressly disclaim any obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.
You should also note that this Quarterly Report on Form 10-Q may contain references to industry market data and certain industry forecasts. Industry market data and industry forecasts are obtained from publicly available information and industry publications. Industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of that information is not guaranteed. Although we believe industry information to be accurate, it is not independently verified by us and we do not make any representation as to the accuracy of that information. In general, we believe there is less publicly available information concerning the international gaming, social and digital gaming industries than the same industries in the U.S.
Due to rounding, certain numbers presented herein may not precisely recalculate.
6

PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (unaudited)

LIGHT & WONDER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
 Three Months Ended June 30,Six Months Ended June 30,
 2024202320242023
Revenue:  
Services$526 $496 $1,044 $973 
Products292 235 531 427 
Total revenue818 731 1,575 1,400 
Operating expenses:  
Cost of services(1)
111 110 223 218 
Cost of products(1)
125 108 233 201 
Selling, general and administrative220 203 438 396 
Research and development66 58 128 112 
Depreciation, amortization and impairments87 108 173 208 
Restructuring and other 34 31 40 50 
Operating income175 113 340 215 
Other (expense) income:  
Interest expense(75)(78)(150)(153)
Other income (expense), net8 (15)18 (16)
Total other expense, net(67)(93)(132)(169)
Net income before income taxes108 20 208 46 
Income tax expense(26)(15)(44)(14)
Net income82 5 164 32 
Less: Net income attributable to noncontrolling interest— 6 — 11 
Net income (loss) attributable to L&W$82 $(1)$164 $21 
Per Share - Basic:
Net income (loss) attributable to L&W$0.92 $(0.01)$1.83 $0.23 
Per Share - Diluted:
Net income (loss) attributable to L&W$0.90 $(0.01)$1.78 $0.22 
Weighted average number of shares used in per share calculations:  
Basic shares
90 91 90 91
Diluted shares
92 91 92 93
(1) Excludes D&A.
See accompanying notes to consolidated financial statements.
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LIGHT & WONDER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Net income$82 $5 $164 $32 
Other comprehensive (loss) income
Foreign currency translation (loss) gain, net of tax(1)37 (30)50 
Derivative financial instruments unrealized gain, net of tax— 10 6 3 
Total other comprehensive (loss) income(1)47 (24)53 
Total comprehensive income81 52 140 85 
Less: comprehensive income attributable to noncontrolling interest— 6 — 11 
Comprehensive income attributable to L&W$81 $46 $140 $74 
See accompanying notes to consolidated financial statements.
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LIGHT & WONDER, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except par value)
 As of
June 30, 2024December 31, 2023
ASSETS
Current assets: 
Cash and cash equivalents$321 $425 
Restricted cash95 90 
Receivables, net of allowance for credit losses of $37 and $38, respectively
575 506 
Inventories186 177 
Prepaid expenses, deposits and other current assets112 113 
Total current assets1,289 1,311 
Non-current assets:
Restricted cash6 6 
Receivables, net of allowance for credit losses of $7 and $3, respectively
60 37 
Property and equipment, net269 236 
Operating lease right-of-use assets45 52 
Goodwill2,925 2,945 
Intangible assets, net529 605 
Software, net162 158 
Deferred income taxes180 142 
Other assets73 60 
Total assets$5,538 $5,552 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt$22 $22 
Accounts payable277 241 
Accrued liabilities362 404 
Income taxes payable35 29 
Total current liabilities696 696 
Deferred income taxes19 20 
Operating lease liabilities31 39 
Other long-term liabilities157 180 
Long-term debt, excluding current portion3,849 3,852 
Total liabilities4,752 4,787 
Commitments and contingencies (Note 15)
Stockholders’ equity:
Common stock, par value $0.001 per share, 199 shares authorized; 117 and 116 shares issued, respectively, and 89 and 90 shares outstanding, respectively
1 1 
Additional paid-in capital1,175 1,118 
Retained earnings844 680 
Treasury stock, at cost, 28 and 26 shares, respectively
(927)(751)
Accumulated other comprehensive loss(307)(283)
Total stockholders’ equity786 765 
Total liabilities and stockholders’ equity $5,538 $5,552 
See accompanying notes to consolidated financial statements.
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LIGHT & WONDER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
 Six Months Ended June 30,
 20242023
Cash flows from operating activities: 
Net income$164 $32 
Adjustments to reconcile net income to net cash provided by operating activities235 320 
Changes in working capital accounts, excluding the effects of acquisition(48)(97)
Change in deferred income taxes and other(39)(36)
Net cash provided by operating activities312 219 
Cash flows from investing activities: 
Capital expenditures(153)(112)
Other(1)
(5)(6)
Net cash used in investing activities(158)(118)
Cash flows from financing activities: 
Payments on long-term debt(5)(11)
Payments of debt issuance and deferred financing costs(2)— 
Payments on license obligations(14)(18)
Payments of contingent acquisition considerations(14)(9)
Purchase of L&W common stock(175)(33)
Purchase of SciPlay’s Class A common stock— (23)
Net redemptions of common stock under stock-based compensation plans and other(40)(11)
Net cash used in financing activities(250)(105)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(3)1 
Decrease in cash, cash equivalents and restricted cash(99)(3)
Cash, cash equivalents and restricted cash, beginning of period521 967 
Cash, cash equivalents and restricted cash, end of period$422 $964 
Supplemental cash flow information:
Cash paid for interest$146 $147 
Income taxes paid70 96 
Cash paid for contingent acquisition considerations included in operating activities22 9 
Supplemental non-cash transactions:
Non-cash interest expense$5 $5 
(1) The six months ended June 30, 2023 include $3 million in cash used in discontinued operations.
See accompanying notes to consolidated financial statements.
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LIGHT & WONDER, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, amounts in USD, table amounts in millions, except per share amounts)

(1) Description of the Business and Summary of Significant Accounting Policies
Description of the Business
We are a leading cross-platform global games company with a focus on content and digital markets. Our portfolio of revenue-generating activities primarily includes supplying game content and gaming machines, CMSs and table game products and services to licensed gaming entities; providing social casino and other mobile games, including casual gaming, to retail customers; and providing a comprehensive suite of digital gaming content, distribution platforms and player account management systems, as well as various other iGaming content and services. We report our results of operations in three business segments—Gaming, SciPlay and iGaming—representing our different products and services.
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of L&W, its wholly owned subsidiaries, and those subsidiaries in which we have a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation.
In the opinion of L&W and its management, we have made all adjustments necessary to present fairly our consolidated financial position, results of operations, comprehensive income and cash flows for the periods presented. Such adjustments are of a normal, recurring nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2023 10-K. Interim results of operations are not necessarily indicative of results of operations to be expected for a full year.
Significant Accounting Policies
There have been no changes to our significant accounting policies described within the Notes of our 2023 10-K.
Other Income (Expense), net
Other income (expense), net includes gains and losses from foreign currency transactions, interest income, earnings (losses) from equity investments and other items. Other income (expense), net for the three and six months ended June 30, 2024 primarily consisted of interest income of $5 million and $10 million, respectively. For the three and six months ended June 30, 2023, other income (expense), net primarily consisted of foreign currency transaction losses, which totaled $25 million and $38 million, respectively.
Computation of Basic and Diluted Net Income (Loss) Attributable to L&W Per Share
Basic and diluted net income (loss) attributable to L&W per share are based upon net income (loss) attributable to L&W divided by the weighted average number of common shares outstanding during the period. Diluted net income attributable to L&W per share reflects the effect of the assumed exercise of stock options and RSUs only in the periods in which such effect would have been dilutive to net income.
For the three and six months ended June 30, 2024, we included 2 million and 2 million, respectively, of common stock equivalents in the calculation of diluted net income attributable to L&W per share. For the six months ended June 30, 2023, we included 2 million of common stock equivalents in the calculation of diluted net income attributable to L&W per share. For the three months ended June 30, 2023, basic and diluted net loss attributable to L&W per share were the same, as all common stock equivalents would have been anti-dilutive for that period. We excluded 2 million of stock options and 2 million of RSUs outstanding from the calculation of diluted weighted-average common shares outstanding for the three months ended June 30, 2023.
New Accounting Guidance
There have been no recent accounting pronouncements or changes in accounting pronouncements since those described within the Notes of our 2023 10-K that are expected to have a material impact on our consolidated financial statements.
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(2) Revenue Recognition
The following table disaggregates our revenues by type within each of our business segments:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Gaming
Gaming operations$175 $167 $340 $327 
Gaming machine sales228 173 433 331 
Gaming systems82 72 142 127 
Table products54 59 101 105 
Total$539 $471 $1,016 $890 
SciPlay
Mobile in-app purchases$160 $170 $330 $335 
Web in-app purchases and other(1)
45 20 81 41 
Total$205 $190 $411 $376 
iGaming$74 $70 $148 $134 
(1) Other represents $24 million and $36 million in revenue generated via our proprietary direct-to-consumer platform for the three and six months ended June 30, 2024, respectively, along with advertising and other revenue, which were not material for the periods presented.
The amount of rental income revenue included in services revenue within the consolidated statement of operations that is outside the scope of ASC 606 was $136 million and $263 million for the three and six months ended June 30, 2024, respectively, and $123 million and $240 million for the three and six months ended June 30, 2023, respectively.
Contract Liabilities and Other Disclosures
The following table summarizes the activity in our contract liabilities for the reporting period:
Six Months Ended June 30, 2024
Contract liability balance, beginning of period(1)
$27 
Liabilities recognized during the period14 
Amounts recognized in revenue from beginning balance(16)
Contract liability balance, end of period(1)
$25 
(1) Contract liabilities are included within Accrued liabilities and Other long-term liabilities in our consolidated balance sheets.
The timing of revenue recognition, billings and cash collections results in billed receivables, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on our consolidated balance sheets. Other than contracts with customers with financing arrangements exceeding 12 months, revenue recognition is generally proximal to conversion to cash. The following table summarizes our balances in these accounts for the periods indicated (other than contract liabilities disclosed above):
Receivables
Contract Assets(1)
Beginning of period balance$543 $24 
End of period balance, June 30, 2024
635 26 
(1) Contract assets are included primarily within Prepaid expenses, deposits and other current assets in our consolidated balance sheets.
As of June 30, 2024, we did not have material unsatisfied performance obligations for contracts expected to be long-term or contracts for which we recognize revenue at an amount other than that for which we have the right to invoice for goods or services delivered or performed.
(3) Business Segments
We report our operations in three business segments—Gaming, SciPlay and iGaming—representing our different products and services. A detailed discussion regarding the products and services from which each reportable business segment derives its revenue is included in Notes 3 and 4 in our 2023 10-K.
In evaluating financial performance, our Chief Operating Decision Maker (defined as our Chief Executive Officer) focuses on AEBITDA as management’s primary segment measure of profit or loss, which is described in footnote (2) to the
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below table. The accounting policies for our business segments are the same as those described within the Notes in our 2023 10-K. The following tables present our segment information:
Three Months Ended June 30, 2024
GamingSciPlayiGaming
Unallocated and Reconciling Items(1)
Total
Total revenue
$539 $205 $74 $— $818 
AEBITDA(2)
272 70 24 (36)$330 
Reconciling items to net income before income taxes:
D&A
(63)(6)(13)(5)(87)
Restructuring and other
(1)— 1 (34)(34)
Interest expense
(75)(75)
Other income, net
5 5 
Stock-based compensation
(31)(31)
Net income before income taxes
$108 
(1) Includes amounts not allocated to the business segments (including corporate costs) and items to reconcile the total business segments AEBITDA to our consolidated net income before income taxes.
(2) AEBITDA is reconciled to net income before income taxes with the following adjustments, as applicable: (1) depreciation and amortization expense and impairment charges (including goodwill impairments); (2) restructuring and other, which includes charges or expenses attributable to: (i) employee severance; (ii) management restructuring and related costs; (iii) restructuring and integration; (iv) cost savings initiatives; (v) major litigation; and (vi) acquisition- and disposition-related costs and other unusual items; (3) interest expense; (4) gain (loss) on debt refinancing transactions; (5) change in fair value of investments and remeasurement of debt and other; (6) other income (expense), net, including foreign currency gains or losses and earnings from equity investments; and (7) stock-based compensation. AEBITDA is presented as our primary segment measure of profit or loss.
Three Months Ended June 30, 2023
GamingSciPlayiGaming
Unallocated and Reconciling Items(1)
Total
Total revenue
$471 $190 $70 $— $731 
AEBITDA(2)
233 59 24 (35)$281 
Reconciling items to net income before income taxes:
D&A
(79)(11)(12)(6)(108)
Restructuring and other
(3)(2)(9)(17)(31)
Interest expense
(78)(78)
Other expense, net
(16)(16)
Stock-based compensation
(28)(28)
Net income before income taxes
$20 
(1) Includes amounts not allocated to the business segments (including corporate costs) and items to reconcile the total business segments AEBITDA to our consolidated net income before income taxes.
(2) AEBITDA is described in footnote (2) to the first table in this Note 3.
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Six Months Ended June 30, 2024
GamingSciPlayiGaming
Unallocated and Reconciling Items(1)
Total
Total revenue
$1,016 $411 $148 $— $1,575 
AEBITDA(2)
504 132 48 (74)$610 
Reconciling items to net income before income taxes:
D&A
(123)(13)(26)(11)(173)
Restructuring and other
(1)— (2)(37)(40)
Interest expense
(150)(150)
Other income, net
14 14 
Stock-based compensation
(53)(53)
Net income before income taxes
$208 
(1) Includes amounts not allocated to the business segments (including corporate costs) and items to reconcile the total business segments AEBITDA to our consolidated net income before income taxes.
(2) AEBITDA is described in footnote (2) to the first table in this Note 3.
Six Months Ended June 30, 2023
GamingSciPlayiGaming
Unallocated and Reconciling Items(1)
Total
Total revenue
$890 $376 $134 $— $1,400 
AEBITDA(2)
438 113 47 (69)$529 
Reconciling items to net income before income taxes:
D&A
(156)(17)(24)(11)(208)
Restructuring and other(11)(3)(10)(26)(50)
Interest expense(153)(153)
Other expense, net(18)(18)
Stock-based compensation(54)(54)
Net income before income taxes
$46 
(1) Includes amounts not allocated to the business segments (including corporate costs) and items to reconcile the total business segments AEBITDA to our consolidated net income before income taxes.
(2) AEBITDA is described in footnote (2) to the first table in this Note 3.
(4) Restructuring and Other
Restructuring and other includes charges or expenses attributable to: (i) employee severance; (ii) management restructuring and related costs; (iii) restructuring and integration; (iv) cost savings initiatives; (v) major litigation; and (vi) acquisition- and disposition-related costs and other unusual items. The following table summarizes pre-tax restructuring and other costs for the periods presented:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Employee severance and related$— $4 $1 $13 
Legal and related32 — 32 — 
Strategic review and related(1)
— 14 1 18 
Contingent acquisition consideration(2)
(1)9 — 9 
Restructuring, integration and other3 4 6 10 
Total$34 $31 $40 $50 
(1) Includes costs associated with the SciPlay merger, ASX listing, sale of discontinued operations (including ongoing separation activities), rebranding and related activities. Refer to the Notes in our 2023 10-K for more information regarding these activities.
(2) Represents contingent consideration fair value adjustments (see Note 11).
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(5) Receivables, Allowance for Credit Losses and Credit Quality of Receivables
Receivables
The following table summarizes the components of current and long-term receivables, net:
As of
June 30, 2024December 31, 2023
Current:
Receivables$612 $544 
Allowance for credit losses(37)(38)
Current receivables, net575 506 
Long-term:
Receivables67 40 
Allowance for credit losses(7)(3)
Long-term receivables, net60 37 
Total receivables, net$635 $543 
Allowance for Credit Losses
We manage our receivable portfolios using both geography and delinquency as key credit quality indicators. The following table summarizes geographical delinquencies of total receivables, net:    
As of
June 30, 2024Balances over 90 days past dueDecember 31, 2023Balances over 90 days past due
Receivables:
U.S. and Canada$354 $4 $344 $13 
International325 42 240 50 
     Total receivables679 46 584 63 
Receivables allowance:
U.S. and Canada(19)(4)(17)(3)
International(25)(12)(24)(12)
Total receivables allowance(44)(16)(41)(15)
Receivables, net$635 $30 $543 $48 
Account balances are charged against the allowances after all internal and external collection efforts have been exhausted and the potential for recovery is considered remote.
The activity in our allowance for receivable credit losses for each of the three and six months ended June 30, 2024 and 2023 is as follows:
20242023
TotalU.S. and CanadaInternationalTotal
Beginning allowance for credit losses$(41)$(17)$(24)$(40)
Provision(1)— (1)(1)
Charge-offs and recoveries2 1 1 1 
Allowance for credit losses as of March 31$(40)$(16)$(24)$(40)
Provision(6)(3)(3)(4)
Charge-offs and recoveries2 — 2 2 
Allowance for credit losses as of June 30$(44)$(19)$(25)$(42)
As of June 30, 2024, 5% of our total receivables, net, were past due by over 90 days, compared to 9% as of December 31, 2023.
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Credit Quality of Receivables
We have certain concentrations of outstanding receivables in international locations that impact our assessment of the credit quality of our receivables. We monitor the macroeconomic and political environment in each of these locations in our assessment of the credit quality of our receivables. The international customers with significant concentrations (generally deemed to be exceeding 10%) of our receivables with terms longer than one year are in the Latin America region (“LATAM”) and are primarily comprised of Mexico, Peru and Argentina. The following table summarizes our LATAM receivables:
As of June 30, 2024
TotalCurrentBalances over 90 days past due
Receivables$59 $45 $14 
Allowance for credit losses(18)(11)(7)
Receivables, net$41 $34 $7 
We continuously review receivables and, as information concerning credit quality and/or overall economic environment arises, reassess our expectations of future losses and record an incremental reserve if warranted at that time. Our current allowance for credit losses represents our current expectation of credit losses; however, future expectations could change as international unrest or other macro-economic factors impact the financial stability of our customers.
The fair value of receivables is estimated by discounting expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. As of June 30, 2024 and December 31, 2023, the fair value of receivables, net, approximated the carrying value due to contractual terms of receivables generally being less than 24 months.
(6) Inventories
Inventories consisted of the following:
 As of
 June 30, 2024December 31, 2023
Parts and work-in-process$120 $113 
Finished goods66 64 
Total inventories$186 $177 
Parts and work-in-process include parts for gaming machines and our finished goods inventory primarily consist of gaming machines for sale.
(7) Property and Equipment, net
Property and equipment, net consisted of the following:
As of
June 30, 2024December 31, 2023
Land$6 $6 
Buildings and leasehold improvements61 59 
Gaming machinery and equipment764 718 
Furniture and fixtures28 26 
Construction in progress12 7 
Other property and equipment99 94 
Less: accumulated depreciation(701)(674)
Total property and equipment, net$269 $236 
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Depreciation expense is excluded from cost of services, cost of products and other operating expenses and is separately presented within D&A.
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Depreciation expense$32 $30 $63 $57 
(8) Intangible Assets, net and Goodwill
Intangible Assets, net
The following tables present certain information regarding our intangible assets as of June 30, 2024 and December 31, 2023.
As of
June 30, 2024December 31, 2023
Gross Carrying
Value		Accumulated
Amortization		Net BalanceGross Carrying
Value		Accumulated
Amortization		Net Balance
Amortizable intangible assets:   
Customer relationships$902 $(597)$305 $904 $(567)$337 
Intellectual property
940 (791)149 947 (771)176 
Licenses291 (230)61 290 (217)73 
Brand names130 (124)6 129 (120)9 
Trade names163 (159)4 163 (157)6 
Patents and other11 (7)4 11 (7)4 
Total intangible assets$2,437 $(1,908)$529 $2,444 $(1,839)$605 
The following reflects intangible amortization expense included within D&A:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Amortization expense(1)
$38 $61 $75 $119 
(1) The three and six months ended June 30, 2023 include intangible assets non-cash impairment charge of $4 million related to SciPlay restructuring of a certain foreign studio.
Goodwill
The table below reconciles the change in the carrying value of goodwill, by business segment, for the period from December 31, 2023 to June 30, 2024.
Gaming(1)
SciPlayiGamingTotals
Balance as of December 31, 2023
$2,388 $210 $347 $2,945 
Foreign currency adjustments(8)(2)(10)(20)
Balance as of June 30, 2024
$2,380 $208 $337 $2,925 
(1) Accumulated goodwill impairment charges for the Gaming segment as of June 30, 2024 were $989 million.
(9) Software, net
Software, net consisted of the following:
 As of
 June 30, 2024December 31, 2023
Software $1,109 $1,083 
Accumulated amortization(947)(925)
Software, net$162 $158 
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The following reflects amortization of software included within D&A:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Amortization expense$17 $17 $35 $32 
(10) Long-Term Debt
The following table reflects our outstanding debt (in order of priority and maturity):
As of
June 30, 2024December 31, 2023
 Final MaturityRate(s)Face ValueUnamortized debt discount/premium and deferred financing costs, netBook ValueBook Value
Senior Secured Credit Facilities:
LNWI Revolver2027variable$— $— $— $— 
LNWI Term Loan B2029variable2,162 (25)2,137 2,141 
LNWI Senior Notes:
2028 Unsecured Notes20287.000%700 (6)694 694 
2029 Unsecured Notes20297.250%500 (5)495 495 
2031 Unsecured Notes20317.500%550 (7)543 543 
Other——2 — 2 1 
Total long-term debt outstanding$3,914 $(43)$3,871 $3,874 
Less: current portion of long-term debt(22)(22)
Long-term debt, excluding current portion$3,849 $3,852 
Fair value of debt(1)
$3,940 
(1) Fair value of our fixed rate and variable interest rate debt is classified within Level 2 in the fair value hierarchy and has been calculated based on the quoted market prices of our securities.
LNWI Term Loan B Repricing
On July 17, 2024, we amended the LNWI Credit Agreement and reduced the applicable margin on the LNWI Term Loan B. Following the amendment, the interest rate for the Term Loan B is either (i) the Adjusted Term SOFR Rate (as defined in the LNWI Credit Agreement) plus 2.25% per annum or (ii) a base rate plus 1.25% per annum.
We were in compliance with the financial covenants under all debt agreements as of June 30, 2024 (for information regarding our financial covenants of all debt agreements, see Note 15 in our 2023 10-K).
For additional information regarding the terms of our credit facilities and Senior Notes, see Note 15 in our 2023 10-K.
(11) Fair Value Measurements
The fair value of our financial assets and liabilities is determined by reference to market data and other valuation techniques as appropriate. We believe the fair value of our financial instruments, which are principally cash and cash equivalents, restricted cash, receivables, other current assets, accounts payable and accrued liabilities, approximates their recorded values. Our assets and liabilities measured at fair value on a recurring basis are described below.
Derivative Financial Instruments
As of June 30, 2024, we held the following derivative instruments that were accounted for pursuant to ASC 815:
Interest Rate Swap Contracts
We use interest rate swap contracts as described below to manage exposure to interest rate fluctuations by reducing the uncertainty of future cash flows on a portion of our variable rate debt.
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In April 2022, we entered into interest rate swap contracts to hedge a portion of our interest expense associated with our variable rate debt to effectively fix the interest rate that we pay. These interest rate swap contracts were designated as cash flow hedges under ASC 815. We pay interest at a weighted-average fixed rate of 2.8320% and receive interest at a variable rate equal to one-month Chicago Mercantile Exchange Term SOFR. The total notional amount of these interest rate swaps was $700 million as of June 30, 2024. These hedges mature in April 2027.
All gains and losses from these hedges are recorded in other comprehensive income (loss) until the future underlying payment transactions occur. Any realized gains or losses resulting from the hedges are recognized (together with the hedged transaction) as interest expense. We estimate the fair value of our interest rate swap contracts by discounting the future cash flows of both the fixed rate and variable rate interest payments based on market yield curves. The inputs used to measure the fair value of our interest rate swap contracts are categorized as Level 2 in the fair value hierarchy as established by ASC 820.
The following table shows the gain and interest income on our interest rate swap contracts:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Gain recorded in accumulated other comprehensive loss, net of tax$— $10 $6 $3 
Interest income related to interest rate swap contracts recorded in interest expense5 4 9 7 
We do not expect to reclassify material amounts from accumulated other comprehensive loss to interest expense in the next twelve months.
The following table shows the effect of interest rate swap contracts designated as cash flow hedges on interest expense in the consolidated statements of income:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Total interest expense which reflects the effects of cash flow hedges$(75)$(78)$(150)$(153)
Hedged item(5)(5)(10)(10)
Derivative designated as hedging instrument10 9 19 17 
The following table shows the fair value of our hedges:
As of
Balance Sheet Line Item
June 30, 2024December 31, 2023
Interest rate swapsOther assets$28 $20 
Contingent Acquisition Consideration Liabilities
In connection with our acquisitions, we have recorded certain contingent consideration liabilities (including redeemable non-controlling interest), of which the values are primarily based on reaching certain earnings-based metrics. The related liabilities were recorded at fair value on their respective acquisition dates as a part of the consideration transferred and are remeasured each reporting period (other than for redeemable non-controlling interest, which is measured based on its redemption value). The inputs used to measure the fair value of our liabilities are categorized as Level 3 in the fair value hierarchy.
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The table below reconciles the change in the contingent acquisition consideration liabilities (including deferred purchase price) for the period from December 31, 2023 to June 30, 2024.
TotalIncluded in Accrued LiabilitiesIncluded in Other Long-Term Liabilities
Balance as of December 31, 2023
$59 $39 $20 
Payments(37)
Fair value adjustments— 
Other adjustments(1)
(5)
Balance as of June 30, 2024
$17 $10 $7 
(1) Represents extinguishment of $5 million in redeemable non-controlling interest liability associated with SciPlay’s acquisition of Alictus Yazilim Anonim Şirketi in 2022, as specified financial targets for the second year were not met. The gain was recorded in other income (expense), net in our consolidated statements of income.
(12) Stockholders’ Equity
Changes in Stockholders’ Equity
The following tables present certain information regarding our stockholders’ equity as of June 30, 2024 and 2023:
Six Months Ended June 30, 2024
Common StockAdditional Paid in CapitalRetained EarningsTreasury StockAccumulated Other Comprehensive LossTotal
January 1, 2024$1 $1,118 $680 $(751)$(283)$765 
Settlement of liability awards— 65 — — — 65 
Vesting of RSUs, net of tax withholdings and other— (43)— — — (43)
Purchase of treasury stock— — — (25)— (25)
Stock-based compensation— 14 — — — 14 
Net income— — 82 — — 82 
Other comprehensive loss— — — — (23)(23)
March 31, 2024$1 $1,154 $762 $(776)$(306)$835 
Vesting of RSUs, net of tax withholdings and other— 1 — — — 1 
Purchase of treasury stock— — — (151)— (151)
Stock-based compensation— 20 — — — 20 
Net income— — 82 — — 82 
Other comprehensive income— — — — (1)(1)
June 30, 2024$1 $1,175 $844 $(927)$(307)$786 
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Six Months Ended June 30, 2023
 Common StockAdditional Paid in CapitalRetained EarningsTreasury StockAccumulated Other Comprehensive LossNoncontrolling InterestTotal
January 1, 2023$1 $1,370 $517 $(580)$(318)$171 $1,161 
Settlement of liability awards— 25 — — — — 25 
Vesting of RSUs, net of tax withholdings and other— (14)— — — — (14)
Purchase of treasury stock— — — (28)— — (28)
Purchase of SciPlay’s Class A common stock— (8)— — — — (8)
Stock-based compensation